A ‘gray divorce’ can devastate your retirement plans. Here’s how.

Heading into retirement, more couples are calling it quits. Their children are now adults, and they decide they no longer want to be married.

Or facing retirement — another 20 or 30 years in the second season of their lives — some couples decide they would rather not spend it with spouses they no longer like or have anything in common with.

“Retirement is often envisioned as a life stage where a couple finally gets time together,” writes Forbes contributor Joseph Coughlin, the founder and director of the Massachusetts Institute of Technology AgeLab. “The kids are gone, the work is done; now there is time for us. But that uninterrupted time together may not always be the reward that many assume as they plan for retirement.”

These parting of the ways have resulted in an increase in divorce for people 50 and older.

“At a time when divorce is becoming less common for younger adults, so-called ‘gray divorce’ is on the rise: Among U.S. adults ages 50 and older, the divorce rate has roughly doubled since the 1990s,” according to a report last year by the Pew Research Center.

For people 65 and older, the divorce rate has roughly tripled since 1990.

But the breaking up of these marriages can have a profound impact on retirement savings forcing people to readjust their plans.

“Gray divorce potentially endangers retirement for both parties, since they may be living on half the income they’d expected to have and may feel resentful about their change of plans,” writes Tim Sobolewski, president of the Financial Planning Center and Wendy B. Pegan, founder and director of the Creative Relationship Center. “Whatever money the couple has in 401(k) plans, individual retirement accounts, 457 or 403(b) accounts and pensions will usually need to be divided — often with that pricey legal tab.”

Sobolewski and Pegan offer some tips on what to do and what to avoid should you find yourself having to divide your retirement assets in a divorce.

For example, make sure IRA transfers are done properly. “In other words, you cannot just write a check to your ex-spouse — if you do, you will be subject to taxes and penalties,” they write. And be sure to hire an attorney who specializes in Qualified Domestic Relations Order, or QDROs.

“Unfortunately, all of these property divisions have the same effect as starting to save too late in life for retirement, or suffering a major loss in the market: There are no longer enough working years to make up the loss,” they write. “The greatest financial fear for most retirees is running out of money before they run out of life span.”

“To manage marital risk in retirement, some couples are taking the adage that a good marriage takes work to heart,” Coughlin writes. “They are learning that it may be work that contributes to keeping a marriage together through retirement.”

“I’ve seen couples spend $200,000 in legal fees in a tug of war over a $1.5 million estate,” writes Scott Hanson, a certified financial planner. “That’s partly because older people, while usually not involved in long, drawn-out child custody battles, have less time to rebuild financially, which means divorce can literally be a fight for your future standard of living.”

Hanson adds, “It’s difficult to recover from divorce when you’re older because, after 50, you’re more likely to have maxed out your earning potential, your assets may be mostly fixed, and your employment opportunities tend to become more limited. And while it’s true that older divorcers generally have more assets than younger people, they often don’t have as much money as they think they do.”

Hanson, writing in Kiplinger Personal Magazine, warns that if you’re getting a divorce, be careful about giving up too much to keep the house.

Why?

Here’s an example he provided: “I worked with the family of a well-employed, recently divorced woman who bypassed her claim to all other marital assets in exchange for keeping the house, which, when appraised, had almost $1.6 million in equity. Even though she agreed to give up the balance of her 401(k), she was still only in her 50s, and with seemingly many more years left to work. At the time of the divorce, it appeared she’d made out reasonably well. Unfortunately, in rapid succession, she was forced to retire due to a health emergency that coincided with the onset of the 2008 real estate collapse. Eventually, with all her eggs in that one basket, she lost her only real asset to the bank via repossession.”

Your thoughts Did you go through a gray divorce? What was the impact on your retirement plan? Share your story. Send your comments to colorofmoney@washpost.com.

Retirement rants and raves I’m interested in your experiences or concerns about retirement or aging. What do you like about retirement? What came as a surprise.

If you haven’t retired, what concerns you financially? You can rant or rave. This space is yours. It’s a chance for you to express what’s on your mind. Send your comments to colorofmoney@washpost.com. Please include your name, city and state. In the subject line put “Retirement Rants and Raves.”

Last week I asked you to weigh in on this question: Did you think you would work longer to make up for a retirement savings shortfall and couldn’t?

“Yes, had to retire at 62,” Katie wrote. “Loved my job, very busy, healthy as a horse … and then I wasn’t. I had planned on working until at least 66, and because librarians do seem to have staying power, I thought I might even continue longer. I also had a well-paying seasonal gig that I expected to continue. Then I got sick. As in, partially disabled, can’t work, it’s chronic kind of sick. It was a shock. Isn’t 60 supposed to be the new 30? The trouble with me and my peers is we tend to think we’ll go on like this forever. Old age is either for our parents in their 90s, or for other 60 somethings who aren’t somehow trying hard enough (Yoga! Meditation! Diet!). Now I’m scrimping away on Social Security and a small pension, waiting to get into senior housing. As long as I get no sicker I should be okay, but it’s all quite the crap shoot at this point.”

Suzanne Jamison of Gila Hot Springs, N.M., knew she would have to continue working. At 72 she’s still working for herself.

“As a self-employed person for most of my working life, I never made much money after expenses nor could I afford to pay myself health care and benefits.” Jamison wrote. “I did save about $50,000, of which over half disappeared during the financial crash in 2008. I chose to be self-employed to be free to care for my children without sending them to day care or having them go home to an empty house; to be able to attend parent-teacher conferences and school activities; participate in their education; not be tied to a time clock. As a result, I have a very small IRA, very small Social Security payment, and no health care, except for the Part A. I enjoy working and will continue to do so as long as I have clients and capacity. Fortunately, I have no mortgage, no car payments and no credit card debt. If something happens so that I can no longer work, my plan is to move to Bolivia, where I can live more reasonably than in the United States. I have spent three months a year for about the last eight years living and working in Bolivia, so I have some idea about how to live there.”

Myron M. Miller of Raleigh, N.C., wrote: “I think people are dreaming if they think that can work past a normal retirement age. Today’s good jobs require a high degree of technology savvy and most older workers don’t have it. Only those who have the technology skills that are up to or better than young folks will [be able to work] in retirement years. I’m 86 years old, by the way, and still did some paid work up to age 79. I was able to do that because of my expertise in strategic planning and international business, but even now I would have a very hard time finding work if I wanted to.”

Dennis O’Brien from Massachusetts wrote: “I am one of those gainfully employed, well-educated, healthy at the moment people, who plan to work full time until 70, so I can max out on Social Security benefits. Because I love what I do, I am also planning to work part time into my 70s.”

“I am here in New Mexico, where it is clear that age works against you,” wrote T.B. “In fact, of all of the places I applied at most including temps, would not even talk to me. If I did get an interview it was a waste of time. I am 58 and have realized that I am better off going to work for myself. I have heard that 70 is the new 65. I hope to make it that long.”

Judy Burns of Oklahoma City wrote: “My husband retired at 66 (our earliest full retirement age for Social Security). He had been a long-haul truck driver for 40 years. He could not have physically continued to work at that job. I started drawing my Social Security but continued to work at a good job on a contract basis. Because of the advice of a great investment adviser and a good accountant, we were able to add to our modest IRA savings during the additional years that I worked. When I reached 74, I decided that work was no longer fun and I retired. We can afford to do most of what we want to do and we are satisfied with our lifestyle. But we are aware that health-care costs could become an issue as we grow older. My primary warnings to anyone contemplating retirement would be to take no debt into it and get a good investment adviser no matter what your retirement savings may be. You need that financial advice very early in your planning.”

Newsletter comments policy Please note it is my personal policy to identify readers who respond to questions I ask in my newsletters. I find it encourages thoughtful and civil conversation. I want my newsletters to be a safe place to express your opinion. On sensitive matters or upon request, I’m happy to include just your first name and/or last initial. But I prefer not to post anonymous comments (I do make exceptions when I’m asking questions that might reveal sensitive information or cause conflict.)

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Michelle SingletaryMichelle Singletary writes the nationally syndicated personal finance column The Color of Money. Her award-winning column is syndicated by The Washington Post Writers Group and is carried in dozens of newspapers nationwide. Follow